2012 20 8 mindshare digital pov facebook tests new non-social adsDocument Transcript
Facebook tests Marta Mattioli Aug 16, 2012 new non-social adsBackgroundIn the past few days Facebook has been testing a new ad product that will see ads appear in usersnewsfeeds both on desktop and mobile. Sponsored Stories in newsfeeds have been around sinceJanuary 2012, but what is new is that these ads are now going to be shown to users even if they ortheir friends have not directly interacted with the brand - by liking it for example.DetailsFacebook has always stressed the importance of relevance and the user experience being core to itsservice, but the added accountability and pressure created by its stock market listing has forcedFacebook to concentrate on monetizing its platform. The new adverts won‟t have to feature socialcontext such as whether a friend liked or commented on the post. Instead they are served up in asimilar way to a traditional display ad and targeted in a similar way. This is the latest beta test of asuite of products that will let marketers advertise without social context. Last week Facebook rolledout mobile app ads, which allows developers to promote their apps alongside organicrecommendations for users, part of the social platforms growing mobile play. The design of thesenew ads will be similar to other Page Post ads in the newsfeeds, but they will be labeled as“sponsored”. These ads can be targeted by interest, age, and also by platform, such as desktop ormobile.ImplicationsThis new ad format is in the heart of Facebook‟s service, where the majority of users have thehighest dwell time. The benefit of being in the newsfeed is that mobile users are able to see the adswithout a major design change to the homepage. Very high CTR and interaction rates have alreadybeen seen from the more traditional sponsored stories, which now draw-in nearly $1million / day inrevenue. So it is fair to assume we would see similar results with the new ad product. The targetingby age, interest and platform means that advertisers can reach much wider audiences with theirmessages, which is great news. On the other hand, many brands on Facebook have spent a lot oftime and effort in building up sizable fan bases, this has given them premium slots in thenewsfeed, but if this area is to be opened to all paying advertisers, this could devalue the hard workthat brands have put in. To add to that, it will be interesting to witness the reaction of the users andwhether they feel that adverts in their newsfeed for potentially „non-relevant‟ brands diminishestheir experience. This concern has already been raised with the „opt-in‟ version of the adverts. Nowthat it is moving one step further away from the user having opted for interaction, it could intensifythis feeling and potentially lower the engagement of these highly valuable positions. Additionally,how users are going to be able to differentiate between brands that they have liked and those thathave simply paid to be in the space, is still to be decided.SummaryThis change determines different challenges for a company that post-IPO has multiple needs: onone side, to monetize its platform by rolling out new and compelling ad units, and on the other, toretain trust from its users. The two objectives seem clearly divergent, and it‟s now just a matter ofwaiting and seeing what will come next.From a brands perspective it‟s positive for Facebook to be rolling out a richer and more engagingad unit, which will be also more compelling to users than a simple display ad.